Is mortgage insurance tax-deductible in 2025?

When you get a mortgage, you may have to pay for mortgage insurance. This can come in the form of private mortgage insurance (PMI) or mortgage insurance premiums (MIP) if you get an FHA loan. Both are additional payments that you must make to provide insurance for your lender to protect them from the chance that you default on your loan.

Many costs related to owning a home are tax-deductible, so it’s natural to wonder whether you can deduct the cost of mortgage insurance from your income when filing your taxes. Though you cannot currently take a deduction, rules are changing. We’ll break down what you need to know.

Tax laws for PMI and MIP are changing

Currently, you’re not allowed to take a deduction for the cost of PMI or MIP. Previously, for loans issued after 2006, you could take a deduction, but this rule changed in 2021, and deductions are no longer permitted.

The tax code is constantly changing, so you may be able to take deductions for mortgage insurance in the future. Legislation passed in 2025 has reinstated the deduction for mortgage insurance payments beginning in 2026.

In short, you haven’t been able to deduct these costs since 2021, but that will change in 2026 for taxes filed in April 2027.

You may be able to deduct mortgage insurance in 2026

Starting in 2026, recent legislation has added mortgage insurance, including both PMI and MIP, to the list of expenses that count as mortgage interest. Homeowners are permitted to deduct the cost of interest on their mortgage from their taxes, making PMI and MIP payments, as well as other costs such as VA funding fees, deductible as they were prior to 2021.

There are, however, some limitations on this deduction. For one, homeowners can only take deductions on mortgage balances up to $750,000 ($375,000 if married, filing separately). Additionally, taking advantage of the deduction requires itemizing your taxes.

If you have a mortgage that exceeds $750,000, you won’t be able to deduct the full amount of your PMI payment. You also won’t benefit from this deduction if you choose not to itemize because the standard deduction is larger than your total itemized deductions.

Homeowners insurance vs. mortgage insurance

When discussing mortgage insurance, it’s important to make the distinction between mortgage insurance and homeowners insurance.

In short, mortgage insurance protects your lender, and homeowners’ insurance protects you. If your home is damaged or you have some sort of liability caused by owning your home, such as having someone get injured on your property, your homeowners’ insurance is what protects you.

Mortgage insurance protects your lender if you default on your loan. Your PMI and MIP payments cover the cost of the policy, which helps the lender recoup its losses if you stop making loan payments and it has to foreclose.

Starting in 2026, any homeowner will be able to deduct the cost of PMI or MIP. However, homeowners’ insurance is typically only deductible if you own your home strictly for investment purposes and can count the policy’s cost as a business expense.

The bottom line: You aren’t currently able to deduct mortgage insurance

Though you cannot currently deduct the cost of PMI, MIP, or other fees like VA funding fees or USDA guarantee fees, the rules are set to change for 2026. Starting in 2026, you can treat these costs as mortgage interest, allowing you to take the deduction, so long as you follow the rules and limitations for deducting home loan interest costs.

The tax deduction for PMI and MIP is just one of the many deductions that can help homeowners save money on their taxes. If you’re looking for options to make homeownership more affordable, check out other resources on tax deductions for homeowners from Rocket Mortgage®.

This article is for informational purposes only, and is not a substitute for professional advice from a medical provider, licensed attorney, financial advisor, or tax professional. Consumers should independently verify any service mentioned will meet their needs.